Apple's main supplier ready to make iPhone processors in the US: China no longer needed?
Without answering “yes” or “no”, but rather still “no” to the proposal of the US administration, the representative of TSMC most likely hoped for further negotiations and even more favorable terms of the deal. By and large, another "foundry" in the US for TSMC is not particularly needed. In the state of Washington, for several years, its microcircuit plant has already been operating, which has so little influence on the state of affairs that most learned about it from a TSMC press release. TSMC agrees. It seems that, taking advantage of a good moment for her, TSMC has achieved even more favorable conditions for itself - and it looks like this time Apple and TSMC can do something.
There are almost no neutral and balanced comments in the comments on TSMC’s agreement to expand its presence in the United States. Many are delighted: the historic Apple A14, processors designed not only for mobile devices, but also for Macs, will be made in the USA, and even using the advanced 5-nm process developed by TSMC! Others, almost with a calculator in their hands, argue that there is no reason for delight, and in the best case, the Arizona plant (which will be commissioned no earlier than 2024) will become a drop in the bucket and in general has purely political significance.
In 2012, skeptics recall, the US administration and TSMC, as now, agreed to build a TSMC plant in New York State, but in the end, for a number of reasons, the project was closed. And there is no convincing evidence that this time everything will be different. The TSMC press release, as in 2012, announced the company's intention to build a plant in Arizona with the support of the US federal government and state authorities. The construction, according to preliminary estimates of TSMC, will take 3 years. In 2024, if Apple, as it is now, releases new generations of systems-on-a-chip every year, the first chip to be produced at the TSMC Arizona factory will be either the most current Apple A18 at that time or the “last year” Apple A17. And for a 3 nm process if TSMC fulfills its promise. Too cool to be true, but why not?
Why TSMC factory in the USA?
What is TSMC planning to do? Build an Arizona chip factory in 2021-2024. Where exactly - is still unknown, and possibly not yet determined. In 2024, the first phase of this enterprise should be launched, producing 20 thousand 300 mm wafers per month. On each such plate, the size of a pizza, there are approximately 14.5 thousand chips, of which, according to modern standards, 30% are defective.
According to experts, 203 million chips a month is a drop in the bucket. What kind of chips they will be, and by what processes they will be produced, is not reported. In the USA, TSMC has several important customers, the largest of which are Apple and AMD. All these billions of chips per year are likely to be in demand.
In 2024, the TSMC will create 1,600 new highly paid jobs, but that’s not all. The opening of this "foundry" will lead, indirectly, to the appearance of thousands more jobs. In the high-tech field. In the days when millions of Americans lose their jobs because of the coronavirus, tens of thousands of jobs are not inspiring, but by 2024 the situation will definitely change, and not necessarily for the worse. In 2024, it is planned to put into operation the first phase of the plant in Arizona.
From 2021 to 2029, TSMC plans to invest $ 12 billion in this production. Of your own. Technical details of what they plan to turn this plant into by 2029 are not reported, but the size of the investment exceeds two and a half times the maximum cost of an ordinary “foundry”. Usually it is from 3 to 5 billion.
US Processor Cost
Highly paid (by American standards) employees, taking into account the mandatory additional costs for each of them, will put a heavy burden on the plant’s budget and cannot but affect the cost of production - and its prices for consumers. It is so obvious and indisputable that all this venture seems crazy nonsense. Did the US and Arizona authorities promise to pay TSMC for each chip to keep local chips competitive? If we recall the considerations of national security and the participation of the US Department of Defense in all this, this prospect will no longer seem nonsense. But it is somehow “tasteless” and uninteresting. Are US government agencies ready to pay a lot of money for chips inside every iPhone, iPad and Mac?
There is some information on this. Microprocessor "foundries" are now the most robotic production in the world. The proportion of manual labor on them is very small. The staff involved in managing this insanely complex equipment and its maintenance is expensive regardless of where in the Universe it applies its skills and experience.
But this time they decided to go further - it’s about introducing even more intelligent automation, because of which the cost of producing large runs will be several times lower than in mainland China. Apparently, the management of TSMC were able to convince of this. Otherwise, they hardly agreed to participate in this adventure. In the last century, the USA has already done something similar - I know about the NeXT Computer and Be Computer factories, but there were much more such examples. More than a quarter century ago. Can they repeat it?